In the stock market, every price fluctuation affects the nerves of every investor, and there are reasons behind these fluctuations. So, what are the factors that influence the U.S. stock market index?

1. Policy and Economic Factors

Economic development is the most critical factor affecting U.S. stock prices. When a country's economy is in good shape, most companies perform well, leading to rising stock prices. Conversely, prices will decline. The economic cycle also impacts price movements—when the economy is strong, stock prices rise, and during a crisis, they fall.

2. Industry and Sector Factors

In the U.S. market, certain industries and sectors influence each other. Common industry analyses focus on competitive structures, industry sustainability, resilience against external shocks, and the impact of government policies, labor, and financial conditions.

3. Corporate Performance in the U.S.

The operational status and future prospects of U.S. companies are fundamental to stock prices. Theoretically, a company's performance is closely tied to its stock price—better performance leads to rising prices, while poor performance results in declines.

To evaluate a company's performance, we examine:

• Corporate governance standards

• Quality of management

• Competitive strength

• Financial health

Financial health is further analyzed through:

1. Profitability: A company's earnings and growth potential are key. High-profit firms are "blue-chip stocks," while high-growth companies are "growth stocks," often performing well in the market.

2. Solvency: This refers to a company's ability to repay debts, determined by the balance between liabilities, assets, and capital.

3. Liquidity: A company's cash flow is crucial for operations. High liquidity means stronger risk resistance, while low liquidity increases vulnerability. During economic downturns, companies with strong liquidity perform better, whereas weaker firms may face technical bankruptcy if their cash flow breaks down.